Creeping Clutter

A year ago, I laid out a vision for my life at 45. Four months later, I had made significant progress and shared that process with an outline of What To Keep.

With ten months until I’m 45, I find myself slipping backwards.

  • Twitter followers creeping up
  • Constantly checking Twitter #connect for validation/approval
  • Checking Twitter #discover as often as I used to check Google News

Perhaps I have seasonal dissatisfaction disorder and this will clear once I’m able to ride more.

Sounds like I need to:

  • Get Twitter off my phone
  • Check Twitter every other hour (now to April); then every 4th hour (May); then 2x per day (June)
  • Declutter the seven spaces where I spend most of my time (office, kitchen, living room, bedroom, car, garage and closet).

Perhaps I’m over-sensitive to the fatigue I experience from clutter and kid noise. Just in case, I actioned #1 and scheduled #3 across the next week.

Clutter seems to require constant clearing!

How To Own The Hospital

Halfway through my first decade in Private Equity, we used this scheme to raise money for investment.

Step One: Start by creating a partnership agreement that outlines how everyone will work together.

Step Two: To show you a case study with numbers, lets assume that the hospital pays $10 million of gross compensation to the doctors. If the docs form a partnership then the partnership would have net income of $10 million.

Step Three: The docs agree that 25% of their gross compensation ($2.5 million) will be at risk for debt service. This would let them borrow between $30 and $62.5 million.

  • $30 million is $2.5 million total repayment per annum, 15 years, 3% cost of funds
  • $62.5 million is $2.5 million interest only repayment, 4% cost of funds

You could top this up with an equity investment from the docs. I seem to recall that we committed about 20% of the amount that we raised in debt. Let’s ignore that for now.

Step Four: When we used this structure we invested alongside a financial partner. In our case, this was the private equity funds that we advised.

If you were buying a hospital then you might want to have the hospital administration as part of your partnership.

Your partnership could joint venture with a deep-pocket financial partner (private equity fund or insurance company) or an operating partner (hospital management company).

This could double the amount of equity that you had available and take you to $60 to $125 million.

Step Five: Depending on the cash flow strength, and asset structure, of the hospital you are acquiring, you might be able to raise debt that is 2-4x the value of your equity investment.

That gives a range of $180 to $600 million total deal size.

I wonder if there are restrictions on leverage for hospitals?

Step Six: Keep doing what you are already doing.

When we used this structure:

  • We invested in a range of deals, rather than a single business
  • Debt was recourse against the partnership, but not the partners. Putting this in context of the above example – the bank that lent the money to could come after your medical practice but couldn’t come after the doctors
  • Proceeds from the deals (dividends and capital gains) were sufficient to cover the cost of partnership debt service. Putting this in context – structured properly, the hospital investment generates enough cash flow so doctor compensation stays the same

Step Seven: Run the hospital to pay down debt and generate cash for the doctor’s investment vehicle.

The structure came about because the partners realized that the assets (in our case investment funds) were useless without the investment team.

The deal we did was part of a restructuring that enabled the workers to control their means of production.

Nobody mentioned the irony.

Nutritional Vigilantes

Paleo diet is back in the news.

Please remember that branded nutrition is a distraction from what matters in your life.

Let’s free our minds by taking nutritional dogma and throwing it in the trash.

We do this by discounting the advice of:

  • Sedentary, obese experts
  • Underperforming athletes
  • Anyone with an agenda to sell us

This leaves us with:

  • Eat less sugar
  • Eat more veggies

…but it can’t be that simple.

Have you tried those two changes and watched what happens?

Focus on simple adjustments that capture the bulk of the improvement available.

Everything else is details.

Don’t debate the details.

Focus on what works.

More veggies, less sugar.

Al-Anon for Preschool Parents

Once a term my daughter’s school holds community night and the parents gather. We sing our kids’ favorite songs, do a craft project and share the challenges that we’re facing.

Seeing that we aren’t alone is an effective antidote for the tendency to feel sorry for ourselves.

Here’s what I learned this time:

Groups are powerful – I’m an introverted extrovert. I get a rush from interacting with people yet spend much of my life alone. The release, and motivation, that I get from smart people is beneficial to me.

Each time I get excited in a group, I tell myself I need to talk less next time!

Parenting is a skill – don’t beat yourself up in the early years – it’s going to take years just to learn enough to see what you need to work on.

Often we focus on what’s not going right in our lives – sitting in the group I released that we are getting a lot right.

One of the parents works in psychology. She reminded us that parents who report the most satisfaction prioritize as Self – Marriage – Kids.

My goal isn’t perfection – my goal is to improve a bit on the previous generation.

Siblings Without Rivalry is a book that provides practical tips for parents. Also, helpful for dealing with single kids and schoolyard rivals.

Moving as a young family & coping with financial stress – kids most value time with their parents – when we think they are attached to material goods, we might be projecting our desires on them

MeltdownsIn the moment, the child is blind to the pointlessness of the trigger; to help them get back under control… repeat what you see:

“You are really frustrated with that car.”

“You are really mad because your sock won’t go to your knee.”

“You are sad because the ballon is missing.”

Later come back to “that thing” and see if they can learn to experience their pre-meltdown phase in an physical sense. Helping them feel the trigger rising in them can lead to awareness before they spin out of control.

Reframing the present, I remember that the worse the meltdown, the better the following week.

Reframing the present, I tell myself that she might need to blow off steam once a month.

Addressing my fear of disturbing the neighbors, I shared a story of taking my daughter outside…

Daddy, why are we going outside?

So when the police come they can see you are OK.

Somewhere – between over-protecting and under-protecting – lies the child’s true needs. Respect differences in approach.

I shared a story of watching my son fall down a flight of stairs. In my defense, there was carpet on the stairs. I support learning by letting painful things happen. My wife feels the kids’ pain – very tough for her to teach via negative experience. So I take my daughter away for weekend trips. Things go wrong, we deal with it.

Whining is debilitating – I always have earplugs available to take the edge off my daughter. Makes me a better man, and a safer driver!

Anxiety – giving my daughter a verbal list of what will happen lets her know the transitions in her day. Transitions trigger anxiety in my daughter. Knowing how things will unfold in advance gives her comfort. We give advance notice of change, but never before bedtime!

An example: this list is very comforting to my daughter. I repeat…

  • nap
  • snack
  • pick up (from school)
  • swim
  • CostCo
  • dinner
  • Then… she repeats, or changes the order a little.
  • Then… we agree what will happen in advance.
  • This smooths the transitional periods, which act as triggers for her meltdowns.

Bedtimes – try the exact same routine every night (previous article for you). Our mantra:

  • Brush teeth
  • Bathroom
  • Pajamas
  • Story
  • Milk
  • Countdown (she likes to count before I turn off the lights)

The world is split into her choices, and our choices. When it is time for her choice, we let her know. When we respect her desires, we let her know. We acknowledge when she’s sad due to having to follow our choice. I make a habit of offering her frequent (binary) options.

Our kids give us an opportunity to clear what we carry forward from our past.

Forgive the past, forgive ourselves and see the temporary nature of everything.

All this stuff works great on adults.

Family Legal Structure

Was chatting with a doctor buddy and ran through a potential legal structure for an American family that contains one, or more, high earners.

It goes like this (picture at the bottom)…

Step One: Once you get married, you split the family balance sheet in half.

Step Two: As you have kids you:

  • set up 529 accounts for each kid 
  • set up minor accounts for each kid

Gift into kids 529 and minor accounts as desired and subject to gifting rules. 

Step Three: Main wage earner, often this is spouse with greatest potential for adverse legal judgements, gifts some, or all, of balance sheet to an irrevocable Grantor Trust that benefits other spouse and kids. Note – irrevocable. You can insert clause that spouses need to be together for a spouse to benefit else kids only. Look into lifetime gift and generation skipping tax exemptions for Settlor of the Grantor Trust. Never gift capital that you might need in your lifetime.

Step Four: Both spouses hold residual assets in name of revocable living trusts. Wills are structured to flow assets to Living Trusts. This makes it easier for your survivors to administer your affairs.

Step Five: Dynasty Trust receives any elder generation inheritance or gifting. This is to avoid taking capital directly that one generation is likely to pass to their kids or grandkids. Consult an expert about generation skipping taxes.

Step Six: All wills and living trusts flow funds to Dynasty Trust eventually.

Capacity to create, and implications of, the above structure vary by jurisdiction so take professional advice. This is a gross simplification but will point you, or your professional adviser, in the right direction.

A picture of the structure follows…

Family Legal Structure

This shows why people call the estate tax a voluntary tax and one way families structure around tax.

Pre Race IVs

Given that blood transfusions are in the news, with an interesting history of their use in cycling available, I thought that I’d put this out there.

The first I heard of pre-race IVs in triathlon was a decade ago. The context was their use to increase blood volume in the 80s. The timing was before an Ironman triathlon.

I’ve used sodium citrate in a pre-race drink and that’s been reported to increase blood volume. Given that there are numerous pre-race beverages that contain sodium citrate, perhaps we’re talking about a similar mechanism. However, you don’t need to travel with a doctor to drink a beverage with sodium citrate.

I’ve started hearing about pre-race IVs again, in the context of professional and elite amateur triathlon. While we might be talking about saline and vitamins, it does make one wonder what else might be in the bag and if the IV is part of a larger program.

Manipulating Watts Per Kilo

Lots of talk about watts per kilo in the cycling press.

All of these discussions assume the data is reliable. We may have reason to doubt the data. I certainly don’t believe it.

Here’s why.

Former elite cyclists, like retired banking CEOs, tell us the system has been corrupt for over 20 years.

That’s one concern. Endemic corruption across the timeframe when we are collecting data.

The other concern comes from running a testing lab, our customers would consistently under report their weight when we compared their sign in data to our pre-test scale.

We are all prone to mistakes with our weight. Just cross check your drivers license weight with a scale. Mine’s out by 6% right now!

Note that under reporting increases watts per kilo – my point is one of reliability for discussion. The data and resulting calculations appear unreliable.

Third concern, I don’t have an engineering degree but can easily adjust what my ride file reports as power. Simply need to tweak my slope or calibration.

If me, and my bros, had to ensure that you never saw more than, say, 5.9 watts per kilo. We could make that happen. It’s easier than making sure we don’t fail a drug test.

What this means for you.

As an amateur athlete looking to improve… take the elite data, throw it in the trash and rely on your own performances.

Understand that even your own data has a margin of error.

Cyber Strikeout

Consider why you are on the internet.

I’m on because it is an effective way for me to share my writing, communicate quickly and learn. I need to remember these reasons because the internet, like certain people, can be an emotional drain.

In cyberspace, I operate a one-strike-you’re-out policy. When I come across a source of discord, I block it. Following a decade of pruning, this only happens once a quarter and keeps my mind free of clutter.

I’ve noticed that many of my pals take Facebook quite seriously, with posts and comments impacting their mood. I’ve heard…

  • Did you see that…
  • I can’t believe that…
  • Why did they…
  • I wish I had less friends…

Most people struggle to break free from tabloid journalism – we’re all hardwired for voyeurism. The way I started was to eliminate one site for a month – I started with a chat forum that I used to check hourly. It was tough but I told myself that I only needed to last 28 days.

Because our brains are wired to notice negatives, more than positives, it only takes a small trigger to adversely impact our mood. Within your online life, it might be worth considering your strike rate.

How often does a site, a person or a situation trigger negative thoughts?

In my life, Facebook and chat forums had a strike rate of once per login. It was easy to see an immediate benefit from breaking their hold on me.

Similarly, because they have a low value-to-noise ratio, there aren’t comments sections on any of my websites. My sites exist to share useful information and free my mind via publishing.

Leaving a habit behind forever can seem daunting. As humans, we’re very attached to our habits, even those that hurt us (smoking, abusive relationships, toxic people, media sources that generate fear & anger).

Take a break for 28 days then ask yourself if you miss it.

This habit will change your life.

Sorry About That

Got pulled into a Twitter discussion about clean sport today.

Cleaner doesn’t mean clean. Consider 88 Olympics and decade that followed.

I can roll off 12 cheats in my peer group, which is more narrow than elite sport. Joe Public reads 12 and would reasonably think that’s pretty close to zero. How many riders in USADA report?

We should be cautious with statements that can’t be checked. I’m trying to improve this aspect of my own writing. Not as careful as you.

Basic psychological tricks can be used to manipulate our perception of facts. Thinking, Fast and Slow is a book that explains how. Antifragile is a book that explains the dangers of manipulated thinking for researchers.

To protect my thinking, I try to point out, to myself, when a statement might be manipulating my thinking.

I broke one of my rules by engaging directly. Civil discourse best done via general statements and mutual respect. Twitter lousy platform for that!

You may have taken my tweets as a criticism of your work. Not true and sorry about that.

With respect,


Spot Testing Is A Waste Of Money

I read that US Cycling is going to start a whereabouts and spot testing program for age groupers.

Perhaps they don’t realize that many of the top athletes (certainly in my AG) spent most of their adult lives successfully avoiding such testing?

Here’s what might work…

Have an elite licence and want to collect prize money at any race, or compete at prestige events (National or World Champs), then you contribute, say, $1,200 per annum towards a full bio passport.

Have an amateur licence and want to race prestige events then you contribute $250 per annum towards a blood bio passport.

An up-coming piece on Endurance Corner will address common objections that we hear. I’ll tweet that up, when live.

Pay attention to the people that say it can’t be done, or isn’t necessary.